THQ Suffers Big Annual Loss

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The WWE, UFC and SmackDown vs. Raw publisher is up against the ropes.

By Nate Ahearn, Ryan Geddes

During THQ's quarterly financial call today, the publisher reported yet another quarter of disappointing sales amounting to a total loss of $431.1 million, or $6.45 per share, for the 2009 fiscal year ending on March 31, 2009. That's in comparison to 2008 when the company saw a loss of just $35.3 million, or $0.53 per share. Total sales for the 2009 fiscal year were $830 million in comparison to last year, which saw about $1 billion in net sales.

"In light of a challenging fiscal 2009, we have substantially completed a significant realignment of our business to position THQ for profitability and positive cash flow in fiscal 2010," said Brian Farrell, THQ president and CEO. "We are investing in the brands and products with the highest potential to drive THQ's long-term profitable growth."

To achieve that, THQ is following a multi-pronged strategy, which includes building its appeal among hardcore gamers with titles like Darksiders, Red Faction and Saints Row; continuing to push wrestling/fighting brands like WWE and UFC; making its kids and family games stronger and more profitable; and taking its established brands into new markets (a la Warhammer 40K).

Despite the earnings and sales slump, THQ had some highlights during the past fiscal year. The publisher shipped 2.8 million copies of Saints Row 2 and saw success with Warhammer 40,000: Dawn of War II, which debuted as the best selling PC game across major video game markets worldwide.

And there are plenty more THQ fan favorites on the way this year and next. In an earnings conference call, the company confirmed that SmackDown vs. Raw 2010 is coming in 2009 and said a new entry in the MX vs. ATV offroad racing series is in the works. Sequels to Saints Row 2 and Marvel Superhero Squad are also planned. The latter is set to become an annual franchise, THQ said. A title called WWE Online is also being developed in Asia, but executives on the THQ conference call did not share details about that game.

For the fourth quarter of the 2009 fiscal year THQ reported a net loss of $96.9 million, or $1.44 per share, up from $34.5 million, or $0.52 per share, for the same quarter a year ago.